Friday, June 7, 2013

The smack on the metals will quickly fade and we'll go on to new highs. Unfortunately, I'm afraid to say - and I know I'm right about this - the only "Change" with our Government will be more CHANGE for the worse.

The government put Fannie and Freddie into conservatorship almost five years ago, and deferred the hard work of creating a new, viable housing-finance market. Now the act of keeping them alive for so long has created a sense of entitlement among shareholders who are demanding to be treated as nicely as those who were bailed out at American International Group Inc.Ask yourself this: Under normal circumstances, would you buy stock in a financial institution that told you its assets were worth about $177 billion less than its liabilities? That number comes from Fannie’s own disclosures.

Some investors hope Congress will write new laws that create long-term value for stockholders. This is understandable. The bailouts of 2008 and 2009 showed that crony capitalism is a great way to make money if you can get in on the action. Buying Fannie or Freddie shares is a bet that some well-connected hedge funds and other moneyed interests can persuade the government to do their bidding, never mind whether it serves the public good.

This week, Bruce Berkowitz’s Fairholme Capital Management LLC issued a news release that said it owned junior preferred shares of Fannie and Freddie with a $2.4 billion face value, and that it is “ready to help with a restructuring.” Presumably the plan entails making as much money for Berkowitz as possible. Paulson & Co., the hedge fund run by billionaire John Paulson, also has been lobbying for a privatization of Fannie and Freddie to boost the value of preferred shares it bought. If they can profit from an act of Congress, it boosts the odds that lower-ranking common shareholders might benefit, too.New Dawn

Maybe it’s starting to dawn on the markets that such an outcome would infuriate many Americans, in which case Congress might choose not to cooperate.

Yup. But India snapped back on Friday from the import tariff shock and they'll be buying hand over fist Monday (Sunday nite). Also, don't forget that Viet Nam, Turkey, Russia and the Middle East all have a voracious appetite.

A source at the local financing office said that the company was founded in 2007 in Jiangyin (江阴), Jiangsu and has been losing money ever since. It’s been able to receive loans from banks because of its close relationship with Jiangyin City Construction and Comprehensive Development Ltd. (江阴市城镇建设综合开发有限公司), also known as City Constriction.

“The owner of Rong Tai and the owner of City Constriction are the same person: Xu Cailiang,” the source said.

Good points all around. But do bear in mind the Chinese overseas agents are not bound by holidays back home.Their central bank, sovereign wealth fund, and state banks all may be buying at any given time or place, on or off market, with or without a record of the transaction.

hey, I just read Paul Craig Roberts on the great takedown in April, and he was quoting you at length in his great analysis. wow. you're really getting a lot of press these days. and then there's that guy at the Perth Mint too. lol. glad to see you're getting your just (and unjust) desserts for your own impeccable analysis. have a great weekend and don't let the bastards get you down. we'll have our day! the Golden Truth will out!

You're tracking paper gold Dave. It will continue to go lower even as real physical premiums are paid by strong hands. For tons, the premium is beyond anything you'll ever see in print. Just ask Germany ... it's all about TIME. What kind of paper debt premium do you place on 7 years.

You will not recognize this world by then as compared to today. Put a paper price on that if you can, and tell me how to value that premium.

The way that you'll know that it's time for lift off is when George Soro's is all in on physical silver.This guy has some kind of inside track as to how the markets play.He seems to get into various opportunities and then out at the right time , almost every time. Me feels luck has nothing to do with it.

Web inventor Berners-Lee warns forces are 'trying to take control' Companies and governments “trying to take control of the internet” are undermining the founding principles of the web, Sir Tim Berners-Lee has warned.

The inventor of the World Wide Web said the internet is facing a “major” threat from “people who want to control it on the sly” through “worrying laws” such as SOPA, the US anti-piracy act, and through the actions of internet giants.

“If you can control [the internet], if you can start tweaking what people say, or intercepting communications, it's very, very powerful...it's the sort of power that if you give it to a corrupt government, you give them the ability to stay in power forever.”

Sir Tim was speaking as it emerged that the US government has been collecting huge amounts of personal information from Google, Facebook, Apple and other internet companies.

There have also been reports that British spies have been gathering intelligence from the internet giants "through a covertly run operation set up by America's top spy agency"

“Unwarranted government surveillance is an intrusion on basic human rights that threatens the very foundations of a democratic society,” Sir Tim said. “I call on all web users to demand better legal protection and due process safeguards for the privacy of their online communications, including their right to be informed when someone requests or stores their data.

MW: As CFO of Crazy Eddie, you were involved in a lot of the accounting fraud. Do you think auditors are equipped to find fraud?

S.A.: I do not believe that most auditors are adequately trained to find fraud and do battle with fraudsters of my former caliber. Documents don’t commit fraud; the people controlling the documents commit fraud. For example, most auditors are not taught fraud psychology — the behavioral dynamics of fraud. Auditors are rarely taught about emotional manipulation and misdirection used by fraudsters to manipulate their behavior during audits and successfully carry out their crimes. They are unprepared for the psychological games played by fraudsters.MW: Do retail investors have a false sense of security when they invest in an audited company?

S.A.: Yes, audits give retail investors a false sense of security. The term “audit,” as it is currently used, is a fraudulent term. It is meant to convey a sense of confidence in the financial reports. Audits are not designed to find fraud. However, the field work performed by what we call “auditors” is of a limited scope. They take samples. In reality, what we call “audits” are actually limited compliance reviews of the books and records. Currently, audits are essentially designed to catch accidental material bookkeeping errors, not deliberate fraud. To do an effective audit, the auditors would have to be in every single place all of the time watching every single bean come in and out of the company, which is clearly impossible. What they are doing now is basically potluck. That’s why most frauds are not caught by auditors.MW: Are insider-trading laws effective?

S.A.: No. The problem with insider trading is it is very difficult to police. Most of it is basically invisible. Meanwhile, the Securities and Exchange Commission basically abrogated its obligation to prosecute sophisticated financial fraud where companies, financial or nonfinancial, have manipulated their books and records.

MW: I’ve heard a lot of concern from consumer-advocate groups about regulation under consideration by the SEC that would permit “crowdfunding,” which allows people to go online and invest in small businesses with very little SEC oversight or disclosure.

S.A.: The JOBS Act makes me want to reconsider my retirement from crime — ha-ha. It is a license to steal. Any time you take away a layer of oversight, a layer of checks and balances, the criminals are going to take advantage of it.

Here we can see just how insignificant precious metal investment is compared to the total U.S. Retirement market. Furthermore, the current total value of the GLD & SLV is only worth 1% of the entire United States IRA market.How can this be? How did the public get hoodwinked into owning such a large degree of paper assets when gold used to be apart of an individual’s portfolio in the past? The answer to that question is probably due to the public suffering from four decades of amnesia since the dollar was backed by gold.The financial system is in a complete mess. The only thing holding the global paper facade together is the continued monetary stimulus and bond purchasing by the world’s central banks. This sort of activity has a lifespan, whose death may be close at hand.

"75% of U.S. Pension funds are invested into Equities, Treasuries and Bonds. Furthermore, the global insurance funds that make up nearly $25 trillion have the majority invested in Foreign Bonds, Corporate Bonds and Equities."

Nevada State Pensions works this way: The Pension Fund will be completely funded in 25 years and is 70% funded (yeah, right...). This type of management has been done by the Federal & State Governments to get loans by making "future predictions" of how much they expect the State's revenue to be 10,15,20 years into the future. The crash of 2008 put a damper on that one but all the talk about "recovery" is to try to remove that damper.

However, this is also being played out. The state worker puts in 11.35% of their pay into it (in Nevada). But, unlike social Security, so does taxpayers because the State has to match the 11.35% by State Law. So the worker gets his retirement funded doubled at half-off price. BUT it gets even BETTER! After 5 years, the worker becomes "vested" and can change to an "employer-only" (instead of employer-employee) and taxpayers pays for ALL of it. BUT it gets even BETTER!!They get their retirement based on their 3 highest years so if they can get into a high position they will get their retirement pay at that income, even if they are demoted. They will only get 75-90% of it - not bad when considering they didn't even have to invest wholly into the system. And, if they hold down 2 or 3 "titles of positions", they get 3 retirements for each position (I have no idea how they do it but, last year, they were finding retired state officals doing just this and they are still doing it). Plus they can "double-dip" when they get retirement and work for the state again.

What supports this is your local State offical who either is invested in the state pension or have many love ones/friends they had helped get a job in state government. Pension reform won't happen till it collapses.

When US pensions blow, just hope you're not in any need of emergency services as there will be a lot of pissed-off people.

When it comes to gold, Bill has dedicated his life to exposing fraud and shedding light on the one true money. But that doesn't stop him from being the first to admit that the past two years have been an absolute disaster for investors, the mining shares have been decimated and gold has been pounded by the cartel! Have they successfuly broken the backs for the gold investor, Bills answer is yes they have...

This is a classic cartel structure: artificially limit the supply of what is in demand.

So how does the Fed artificially create scarcity-value for its freely created trillions of dollars? It restricts access to all that beautiful free money. Wouldn't it be nice if you and I could reach in and grab a couple of million bucks from the overflowing till?

Or almost as good, how about borrowing a couple million at nearly zero interest rates? At .5%, the annual interest payment on $2,000,000 is a measly $10,000.

Alas, access to the nearly free money is restricted to a small financial Elite, the Aristocracy in our neofeudal debtocracy. This tiny Elite can borrow the money for nearly nothing and then go out and buy real-world assets with the digitally created credit.

Debt-serfs have access to limited sums of this free money, but at much higher rates of interest: for example, student loans cost between 6% and 9%.

When debt-serf purchases of assets serve the agenda of the political/financial Elites, for example buying an auto or home, then the free money is doled out to secure the key feature of debt-serfdom--serfs must service all the debt they take on, thereby enriching the financial system that loaned them the money.

And where did the financial sector get the money? From the Federal Reserve.

"With respect to the Internet and emails, this does not apply to US citizens and it does not apply to people living in the United States."False on all counts. Civil libertarians expressed outraged. John Simpson heads Consumer Watchdog's Privacy Project. He calls what's ongoing "a completely unwarranted violation of our constitutional rights."Obama authorized sweeping domestic spying. He did so unconstitutionally. He institutionalized it. It's ongoing daily. It's warrantless. The 2012 FISA Amendments Reauthorization Act renewed warrantless spying for another five years. It violated constitutional protections doing so.Phone calls, emails, and other communications may be monitored secretly without court authorization. All three branches of government are involved. They're complicit in sweeping lawlessness. Congress is regularly briefly. Bipartisan leaders are fully on board. So are US courts.

Prism gives NSA access to search histories, emails, file transfers and live chats. It's gotten directly from US provider servers. Doing so facilitates mass surveillance. Google denied involvement, saying:It "cares deeply about the security of our users' data. We disclose user data to government in accordance with the law, and we review all such requests carefully." "From time to time, people allege that we have created a government 'back door' into our systems, but Google does not have a back door for the government to access private user data."Previous articles discussed Google's involvement with Bilderberg. CEO Eric Schmidt's a regular conference attendee. He's participating now in suburban London.Infowars reporters Paul Joseph Watson and Jon Scobie said Google and Bilderberg are "merging." Schmidt thinks "privacy is a relic of the past."He wants Google transformed into "the ultimate Big Brother." Conspiring with Bilderberg and NSA are key ways to do it. Company deniability doesn't wash. Google operations are very suspect. CIA funding reportedly launched them. Allying with Bilderberg shows what's at stake. Bilderberg wants Internet control through "cyber resistance." It wants a ministry of truth established. It wants all public information controlled. Google's apparently on board to help. Obama's very much involved. He's waging full-scale war on freedom. It may not survive on his watch.http://sjlendman.blogspot.com/2013/06/freedom-in-america-rest-in-peace.html

The dominance of Washington-based finance has similarly long overstayed its welcome. When the Fed was aggressively expanding its balance sheet in 2008/09, its purchases were essentially accommodating financial sector de-leveraging (the Fed providing a liquidity backstop for troubled banks, leveraged hedge funds, securities firms, REITs and such). Federal Reserve buying (monetization) over the past six months has been of an altogether different kind. Instead of accommodating de-risking/de-leveraging, the Fed purchases have instead incited risk-taking and leveraged speculation.

Even former Fed chair Alan Greenspan went public (CNBC) Friday with his call to begin tapering: “The sooner we come to grips with this excessive level of assets on the balance sheet of the Federal Reserve, which everyone agrees is excessive, the better… The issue is not only a question of when we taper down, but when do we turn? And I think that the markets may not give us all of the leeway we would like to do that.”

Well, the Fed is supposedly one of these days going to “come to grips with this excessive level of assets on the balance sheet.” But there’s a heck of a dilemma developing. The Fed has been using its balance sheet to stoke the asset markets, in the process incentivizing risk-taking and leveraging. If the Fed does at some point decide to restrict asset purchases, where will the markets look to for their coveted “liquidity backstop?”

Eric Arthur Blair aka George Orwell

"Hope" is not a valid investment strategy

Full Time Jobs Over Last 5 Years

Is Your Gold Missing?

Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Epic Quote - "Jesse" Sent This To Me

"The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title." - Anonymous

The Basic Fundamental Problem

What's the solution?

“THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS THE RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION OR LATER AS A FINAL AND TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED.”

Ludwig von Mises – Austrian Economist (1881- 1973)

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie? JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

Priceless Quote From Richard Russell

On Larry Summers: This doofus practically ruined Harvard when he headed it. I can't think of a worse choice to be chief economic advisor. I wouldn't trust Summers to manage a Starbucks franchise.

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.

Quote of the Month

And very relevant in the context of yesterday's post about gold moving higher against all fiat currencies:

Just imagine what would happen if a mere ten percent of the money currently going into bonds were instead to go into gold. As in 1972, the real move has yet to begin.

- Murray Pollit, Pollit & Co.

A Picture Says It All...

www.moneyandmarkets.com

Golden ore samples produced by Eurasian Minerals

Undisclosed exploration site

The Next Reserve Currency?

1 oz. Chinese Panda

Guess who said this?

Rising prices of precious metals and other commodities are an indication of a very early stage of an endeavor to move away from paper currencies...What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment.

-Alan Greenspan, 9 Sep 2009

THIS is what REAL money looks like

1 oz. Gold Eagles

Alan Greenspan said what?

“Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

From "Gold and Economic Freedom" a 1966 Essay by Alan Greenspan

About Me

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for a large bank. I have an MBA from the University of Chicago, with a concentration in accounting and finance.
Currently I co-manage a precious metals and mining stock investment fund in Denver.
My goal is to help people understand and analyze what is really going on in our financial system and economy.